At the Main Street Theater, the cashier, located in a box office at the entrance, receives cash from customers and operates a machine which ejects serially numbered tickets. To gain admission to the theater, a customer hands the ticket to a doorman stationed some 50 feet from the box office at the entrance to the theater lobby. The doorman tears the ticket in half, opens the door for the customer, and returns the stub to him. The other half of the ticket is dropped by the doorman into a locked box.

Required:

a. What internal controls are present in this phase of handling cash receipts?

b. What steps should be taken regularly by the manager or other supervisor to give maximum effectiveness to these controls?

c. Assume that the cashier and the doorman decided to collaborate in an effort to abstract cash receipts. What action might they take?

d. Continuing the assumption made in c above of collusion between the cashier and the doorman, what features of the control procedures would be likely to disclose the embezzlement?